The main reason for this is that the number of competing dentists in the area (in proportion to the population) can make or break your dental practice. It was your livelihood and key connection to the community. by Roy R. Rice, CPA. 1. A strong dental CPA can become a lifelong adviser and planner for your professional and personal financial goals. If there is a broker involved in selling the practice, they will have done the proper due diligence to represent the seller. Here are a few things to keep in mind when you consider the purchase of an existing dental practice: Find out what questions to ask your lender before taking out a dental practice loan, Starting a Dental Practice: 10 Tips for Success, How to Pay Off Dental Debt by Buying a Practice. During this time, you likely started conversations with industry experts about the possibility of acquiring a practice. The buyer will tour the office and discuss practice philosophy with the seller. To understand the current market in your area, be sure speak with multiple brokers and look at a variety of practices. Bank of America, N.A. Loan structure â If you prefer, loans with the first six to 12 months of interest-only payments are available. Consultants can advise you on Hiring and firing, as well as how to customize, establish and maintain your systems â without rocking the boat too much â are all their areas of expertise. Our recommendation tool can help you find the right financing. Your up-front due diligence will prove crucial to a successful transition. Southeast Transitions is now US Dental Transitions. Visit our Dental Practice Listings page. Itâs beneficial to everyone involved and helps curtail any confusion you may have about the environment and philosophy. A longer term is preferable to minimize both the impact on your cash flow and the risk inherent in patient attrition during the first year of your practice. The non-disclosure allows the Transition Advisor to understand what the buyer is looking for and it includes background information about the buyer to share with the seller. Equal Housing Lender new window. This field is for validation purposes and should be left unchanged. Price should be used to screen out dental practices that may have otherwise been a fit if you cannot qualify for the required financing.We have some excellent dental practices for sale right now. They will demand a shorter term (three to five years), which provides you with little or no flexibility to grow the practice with new technology or remodeling. Location could influence both future revenue streams and access to specific amenities you may require. Many dentists choose to buy an established dental practice for the existing patients, but having plenty of patients is no guarantee of success. When done correctly, buying a dental practice provides greater control over oneâs career, the satisfaction of owning and operating a business, and financial security. The staff may not bond with you and may voluntarily leave the practice. One is to borrow from a financial institution, and the other is equity funding, where an investor or consortium of investors inject capital in return for shares in the practice. Buy-in â With this type of sale, you would buy in for 25 to 50% and buy the rest of the practice when the seller decides to retire. Associate with the option to buy â A practice owner may see the value in retaining a quality associate and offer a future option to purchase. Ask yourself: Does this practice match your professional vision, and will it continue to for years to come? To learn more about relationship-based ads, online behavioral advertising and our privacy practices, please review Bank of America Online Privacy Notice and our Online Privacy FAQs. The seller will present the buyer with a few key facts about the dental practice such as: Turnover Hiring consultants may be a great idea not only during the due diligence period, but also during the post-sale transition. Your dental attorney should be at least engaged in the terms of the buy/sell agreement, office lease negotiations, non-compete covenants, establishing your corporation, and lender requirements. Can you perform the specialty care if it has been kept in house? Confidentiality is a key value of US Dental Transitions. Or the seller was writing off $10,000 per year in entertainment expenses and the buyer may not see the need to entertain at the same level. This course is Part II of Mr. Lott's previous Townie Meeting presentation, "Buying a Dental Practice: There is More to It Than Price" This presentation goes into detail on issues in buying or merging a practice, and specific A/R issues as well as other ideas and strategies. Dental-specific CPA â Of course, there are many general CPAs who would like to earn your business â and you may already have one you trust â but we encourage you to have a conversation with a CPA who works with at least 25 dental clients. Patients loyal to the former owner may look for another dentist. 3 Whether youâre a recent dental school graduate looking to establish your career or a seasoned dentist with dreams of relocating, itâs important to have an experienced dental practice broker by your side as you navigate through the process. Is this practice in an urban, suburban, or rural environment? Every buyer must be pre-qualified with a bank prior to meeting with a seller. The term will range from five to 15 years. A Letter of Intent (LOI)or Offer to Purchase (OTP) are (ideally) non-binding agreements that outline the buying dentistâs interest in the dental practice. Bank of America is a registered trademark of Bank of America Corporation. ET. Unlike a start-up practice, an established practice has an existing patient base â and just as important, an existing cash flow. Oftentimes, dentists reach out to ask: âWhat is the process of buying a dental practice?â Buying a dental practice is probably one of the biggest decisions you will ever make in your career. What is the ratio of cosmetic or restorative dentistry versus hygiene? Knowledge is power, and the more you know about this big investment, the better. If the LOI is accepted, the buyer’s due diligence period begins. Whether you are ready to buy now or just browsing for a dental practice, our transition advisors are happy to discuss your options. Is the practiceâs type of dentistry align with your vision? Buying or selling a dental practice will probably be one of the biggest financial transactions you will ever be involved in.. And whilst your years at Dental School will have trained you to provide an excellent clinical service for your patients, no one ever teaches you how to buy or sell a dental business. Consult your financial, legal and accounting advisors, as neither Bank of America, its affiliates, nor their employees provide legal, accounting and tax advice. Learn what steps you should take to prepare for buying a dental practice!Check out our dental practice buyer’s checklist! Exchange and completion. You should plan on keeping your loan for a minimum of five years, so consider a loan with flexible prepayment options. Top 10 Tips 1.Career History â Building the perfect CV Buying a dental practice is a huge commitment, so if you are looking to become a principal, there are a few things you will need to consider. Price is a major consideration when it comes to how much financing you qualify for. As a prospective buyer, put yourself in the sellerâs seat for one moment, and imagine that you have owned this practice for the past 20 to 30 years. We encourage you to look into various funding options as soon as possible. How to Purchase a Dental Practice. Buying my first dental practice in Managing your finances Within six months of completing VT and starting what I thought would be a long(-ish) associate career, I was given an opportunity to think about becoming a partner or completely buying the dental practice and becoming the principal. Make sure that the dentist has the kind of patients and employees you want. We know that you have invested years of hard work into your education and experience. After the non-disclosure is returned, the administrative staff at US Dental Transitions will send the buyer the initial practice information, along with contact information for the Transition Advisor for that specific practice listing. 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